The microfinance sector, while powerful in its mission, operates in a highly volatile environment marked by economic instability, political shifts, and operational vulnerabilities. These inherent risks—from credit and liquidity risks to operational and fraud risks—can threaten the financial stability of an institution and, more importantly, jeopardize the well-being of its clients. A proactive and strategic approach to risk mitigation is therefore not a regulatory burden but a fundamental component of a sustainable and responsible microfinance institution (MFI). By identifying, measuring, and managing risks effectively, MFIs can protect their assets, build resilience against shocks, and ensure the long-term continuity of their mission to serve the poor.

This course is designed to provide a comprehensive and practical framework for developing and implementing a robust risk management system. You will learn to identify the full spectrum of risks faced by an MFI, from the field to the boardroom, and explore the tools and techniques needed to mitigate them effectively. By mastering a holistic approach that integrates traditional and digital risk management practices, this program will equip you to create a risk-aware culture within your institution, fortifying its financial health and strengthening its ability to create lasting impact.

Duration: 5 days

Target Audience:

• Microfinance institution (MFI) managers and executives
• Risk management and internal audit professionals
• Board members and governance specialists
• Professionals in charge of field operations
• Financial inclusion and development practitioners
• Compliance and legal officers
• Data scientists and analysts
• Social entrepreneurs and startup founders
• Regulatory and policy advisors

Objectives:

• Master the core concepts of enterprise risk management.
• Understand the full spectrum of risks faced by an MFI.
• Learn how to identify, measure, and monitor key risks.
• Grasp the complexities of credit risk and liquidity risk.
• Explore strategies for managing operational and fraud risks.
• Understand the role of technology and data in risk mitigation.
• Learn to build a risk management framework and a risk-aware culture.
• Understand the importance of a robust internal control system.
• Grasp the legal and regulatory frameworks for risk management.
• Analyze successful case studies of risk mitigation in the sector.

Module 1: Foundations of Enterprise Risk Management

• The importance of risk management for an MFI
• The difference between risk management and internal control
• The main types of risks: credit, liquidity, operational, and market
• The role of a risk management committee and the board
• The benefits of a proactive risk culture

Module 2: Credit Risk Management

• The main drivers of credit risk in microfinance
• The importance of a well-defined credit policy
• The role of a robust client assessment process
• Strategies for loan portfolio monitoring and management
• Mitigating risk in group-based vs. individual lending

Module 3: Liquidity and Funding Risk

• What is liquidity risk and why it is critical for an MFI
• The main drivers of liquidity risk
• The importance of a diversified funding base
• Strategies for managing a cash flow mismatch
• The role of contingency funding plans

Module 4: Operational Risk

• The main sources of operational risk (process, people, systems)
• The importance of internal controls and segregation of duties
• The role of a management information system (MIS)
• Strategies for managing human error and staff turnover
• The importance of a well-defined operational manual

Module 5: Technology and Information Security

• The main risks of digitization and technology adoption
• The importance of a robust cybersecurity policy
• The role of data privacy and protection
• The risks of using digital channels and third-party providers
• Strategies for managing a data breach

Module 6: Fraud Risk Management

• The main types of fraud in microfinance
• The role of technology in detecting and preventing fraud
• The importance of a clear fraud policy and reporting mechanism
• Strategies for managing staff and client-level fraud
• The role of an internal audit function

Module 7: Market and External Risks

• The main sources of external risk (e.g., political, economic, natural disaster)
• The role of scenario planning and stress testing
• Strategies for managing interest rate and currency risk
• The importance of a well-defined crisis management plan
• The role of a flexible product design

Module 8: The Risk Management Framework

• The components of a risk management framework
• The process of risk identification, measurement, and monitoring
• The role of a risk register and a heat map
• The importance of a risk appetite statement
• The role of regular reporting to the board

Module 9: The Role of the Board and Senior Management

• The responsibility of the board in risk oversight
• The importance of a risk-aware culture from the top down
• The role of senior management in implementing the framework
• The importance of clear communication and accountability
• The link between risk management and corporate governance

Module 10: Scaling and Sustainability

• The challenges of managing risk in a growing MFI
• The importance of a scalable risk management system
• The role of technology in automating processes
• The long-term financial sustainability of a risk-aware MFI
• New trends and innovations in the sector

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.